"But that is something we'll be taking up with the federal government," Mr Baird said.

His predecessor Barry O'Farrell had also previously indicated he would discuss the issue of compensation with the Abbott government.

The blaze started about midday on October 16, 2013 - a day of `high' bushfire danger - as army officers and students at Marrangaroo army base near Lithgow blew up two piles of eight high explosive anti-tank (HEAT) rounds that were past their operational use date.

The State Mine Fire occurred at the same time as dozens of other fires raged across the state, amid soaring temperatures, which altogether went on to destroy 248 homes, claim two lives and cause damage running into tens of millions of dollars.